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Entity A sold computer accessories. The draft accounts for the year ended 31 December 2014 included a motor van with the cost of $1,985,000 which

Entity A sold computer accessories. The draft accounts for the year ended 31 December 2014 included a motor van with the cost of $1,985,000 which was bought on 1 January 2012. Its economic life is assumed to be 8 years.

However, the market has turned down on 1 January 2015, as a result, the motor van was estimated that it could only be able to generate $210,000 cash at each year ended of 2015, 2016, 2017, 2018 and 2019 respectively. It will then be scrapped on 31 December 2019 with a scrap value of $25,000.

Alternatively, the motor van could be sold immediately on 1 January 2015 for $840,000 and $95,000 selling costs incurred. Market interest rates are 12% per annum.

Recoverable amounts on 31 December 2015 and 31 December 2016 are $750,000 and $850,000 respectively.

On 1 January 2016, Entity A changed the depreciation method from the straight-line method to reducing balance method of 20% annually.

On 31 December 2017, Entity A sold the motor van for $580,500.

REQUIRED:

According to accounting standards, provide all necessary journal entries of Entity A on 31 December 2014, 31 December 2015, 31 December 2016 and 31 December 2017.

ACCOUNT NAMES FOR INPUT:

| Road roller | Plant | Machine | Motor van | Land | Building | Inventory | Intangible assets | Bank |

| Payable | Receivable | Retained earnings | Other income | Other expense | Interest expense | Interest revenue |

| Depreciation | Accum. depreciation | Impairment loss | Reversal of impairment loss | Loss on disposal | Gain on disposal |

| Restoration liability | Goodwill | Revaluation surplus | Revaluation deficit | No entry |

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